Eco Investor Update

A Weekly News Update for Environmental Investors

14 May 2012 - No 80

____ Core Securities ____

ASX 100

APA Group
The Australian Competition and Consumer Commission (ACCC) has announced a market inquiry into a new package of undertakings by APA about its takeover offer for Hastings Diversified Utilities Fund.

The undertakings are meant to address all the substantive issues raised in the ACCC's Statement of Issues regarding APA's proposed acquisition.

These include an undertaking to divest the Moomba Adelaide Pipeline System on taking control of HDF and ensuring a right to connect to the South West Queensland Pipeline.

Managing director, Mick McCormack said "We have submitted an undertakings package that we believe resolves all the substantive competition concerns raised." (ASX: APA)

____ Satellite Securities ____

ASX 200

Energy World Corporation
Shares in Energy World Corporation fell to a one year low of 41 cents on 9 May. (ASX: EWC)

Qube Logistics
Qube Logistics has new debt facilities to fund future growth. The $550 million syndicated facility is jointly underwritten by National Australia Bank and Commonwealth Bank of Australia, and has a four year term.

It will be used to refinance $210 million of existing drawn debt by Qube and its operating divisions and fund future growth including the recently announced Moorebank acquisition from Stockland.

Finalization of the facility is subject to a small number of standard conditions. (ASX: QUB)

ASX 300

Infigen Energy
Infigen Energy says the majority of nearby residents surveyed believe the Capital Wind Farm in NSW is either "good" or "very good" for local businesses, with only 1 per cent indicating they thought it had a negative effect on business.

46 per cent of residents surveyed know of someone or a business that had benefited from the wind farm, and 64 percent of local business operators surveyed thought local businesses had benefited from the wind farm.

"The vast majority of respondents believe that wind farms benefit the environment, with 68 per cent indicating that they would support future wind farm developments in the area with only 15 per cent opposed," said Infigen.

The survey also showed that local real estate agents believe that the wind farm has not effected overall property sales and values in the area.

"We sold one in between two windmills and it didn't impact the sale at all. That was about 18 months ago," one real estate agent is quoted as saying. Another commented "We are still selling properties with views of the wind farm; there's no effect on prices."

A total of 234 respondents including 89 business operators from Bungendore and Tarago participated in the survey. Of the respondents, 28 per cent have lived in the area for 20 years or more while 39 per cent have lived in the area for 6 to 19 years. 33 per cent moved into the area in the last five years, which Infigen says debunks the myth that wind farms make people leave their homes.

"A third of the respondents moved to the area since the wind farms began construction and we know of four new houses located between 800 and 2,800 metres from the wind farm that were built after commissioning," said managing director, Miles George. "The strong continued support for new projects in the communities near Infigen's wind farms indicates that vast majority of people live harmoniously with wind farms."

Infigen Energy began working in the area in 2004 and says more than $10 million has been invested directly in the area since construction. About $2 million goes into the local community each year through sourcing supplies from local businesses, payments to land owners and local employee wages. During construction activity this figure increases to $6 million. (ASX: IFN)

Emerging Companies

CBD Energy
On 9 May shares in CBD Energy fell to a three year low of 4 cents. On the same day Hunter Hall Investment Management announced it had sold down its stake from 15.15 to 13.58 per cent; and CBD announced a $25 million line of credit and that the merger with Westinghouse Solar was signed.

The merger agreement was announced in February and will see Westinghouse Solar shareholders own 15 per cent of the merged entity following shareholder approval, which is expected in the third quarter of 2012.

Meanwhile, Westinghouse Solar has implemented a cost cutting program expected to save $1 million annually.

Westinghouse Solar has technology that can reduce the number of components in solar panels and inverters. CBD says there are opportunities to use the technology in Europe and Australia, and to take advantage of the US base to expand operations.

The US$25 million revolving construction financing facility is to fund solar projects in Europe.

Investment bank Chardan Capital Markets, LLC was the sole placement agent for the credit facility. Chardan is said to have a client base of US institutional investors and family offices seeking investment opportunities in public and private Australian entities.

CBD has 3 MW of rooftop projects ready to begin in Italy and is improving its supply chain to support further developments up to 5 MW a month. The focus will be on projects with net margins above 10 per cent. As the financing facility is fully utilized and projects sold, CBD envisages this leading to revenue of $35 million a quarter, it said. (ASX: CBD)

CO2 Group
CO2 Group has won $3.8 million in funding from the Federal Government's Biodiversity Fund for two projects in WA and NSW.

Chief executive officer, Andrew Grant said "The two projects will integrate biodiversity outcomes with large-scale commercial carbon plantings, creating a unique partnership between a for-profit commercial entity and the government. A partnership of this nature and scale has not been attempted outside the not-for-profit sector."

In WA, the project will work to establish corridors between both Lake Magenta Nature Reserve and Fitzgerald National Park and Corackerup National Park and Fitzgerald National Park. The links will contribute to the capacity of the reserves and facilitate biodiversity conservation.

The project will contribute to the Fitz-Stirling Functional Landscape Plan, the Carnaby's black cockatoo Recovery Plan and assist with the conservation of a range of other nationally and regionally significant conservation targets such as western whipbird, mallee fowl, tammar wallaby, western mouse, and black gloved wallaby.

The NSW project adjoins conservation reserves in central NSW. The selected sites will contribute to consolidation of the regional conservation estate and enhance connectivity between some reserves. Reserves that will benefit include Goonoo National Park, Goonoo State Conservation Area, Pillaga State Conservation Area and Pillaga West State Conservation Area.

Conservation target species include the black glossy cockatoo, mallee fowl and sugar glider. Specific flora of conservation significance may contribute to the revegetation and restoration actions.

CO2 said another project site in NSW offers an opportunity to commence consolidation of a chain of remnant vegetation stands along a 100 kilometre section in the Upper Central West and Plains of NSW.

All of the projects supported by the Biodiversity Fund will help to revegetate, rehabilitate and restore more than 18 million hectares of landscape over the next six years. (ASX: COZ)

DoloMatrix International
John White has resigned as managing director adn chief executive officer of DoloMatrix International. He has been appointed a non-executive director. (ASX: DMX)

Hydromet Corporation
Simon Henry's takeover offer for Hydromet has won acceptance with his holding now reaching 63.01 per cent. On 7 May Hydromet's directors recommended that shareholders accept the offer as no higher offer had materialized. Each director and their associates is accepting the offer or selling all of their shares on market for not less than the offer price of 4.8 cents per share. (ASX: HMC)

____ Pre-Profit Securities ____

ASX 300

Ceramic Fuel Cells
Ceramic Fuel Cells has won further government backing in Germany with Ms Annegret Kramp-Karrenbauer, the premier of Saarland, announcing that the State will subsidize the cost of early BlueGen units. Under the "Climate Plus Saar" program, the State Government will pay 30 per cent of the total cost of BlueGen units, including installation, for up to 10 units.

Ms Kramp-Karrenbauer made the announcement when putting the State's first BlueGen unit into operation in the State capital of Saarbrücken.

The State subsidy is in addition to the subsidy from the German Federal Government of 1,800 Euros per unit, and the existing feed in tariff regime under which BlueGen customers get paid for excess electricity exported to the electricity grid.

Meanwhile, a BlueGen unit is operating as part of a Virtual Power Plant project in Germany. A Virtual Power Plant is a cluster of distributed electricity generation units controlled by a central entity using software. It allows power generation to be modulated to meet peak loads and balance intermittent power from wind or solar, with higher efficiency and more flexibility than large centralized power stations.

The BlueGen unit is operating in the Harz region, south of Hannover, as part of the RegModHarz project to develop and operate a Virtual Power Plant combining renewable energy and controllable distributed electricity.

The Harz region has about one-third of electricity produced from renewable sources. Each BlueGen unit is controlled over the internet and the power output can be turned up or down remotely to help balance supply and demand of electricity. The RegModHarz project is funded by the German Federal Ministry for the Environment, Nature Conservation and Reactor Safety.

Ceramic Fuel Cells also said that its products have now achieved a combined one million hours of operation. The first field trial units were operated in Australia, New Zealand and Germany from early 2006. The number of units installed and operating at customer sites is now 199. (ASX: CFU)

Micro Cap Companies

Carbon Polymers
Shares in Carbon Polymers fell to a new low since it became a recycling company - touching 8.1 cents on 9 May. The share price halved over the preceding month and the low was reached a day after the company announced details of its non-renounceable rights issue to raise up to $2.8 million.

The issue price is a low 4 cents per share, which the company hopes will encourage all shareholders to subscribe. Those who do will receive 3 shares for every 5 shares.

The funds will be applied to reducing debt, working capital and costs associated with the upgrade of plant and equipment.

A funding facility is also being negotiated. (ASX: CBP)

Electrometals Technologies
Electrometals Technologies expects revenue for the first six months of this year to be at least double that of the corresponding period last year, and the trading loss likely to be less than half of the first six months last year, said chairman, Gregory Melgaard. The company is making progress but is not out of the woods yet, he said. (ASX: EMM)

Hydrotech International
Hydrotech International has issued a prospectus for a pro rata renounceable entitlement issue to raise $2,181,185 for working capital. The offer is 4 shares for every 1 share at an issue price of 0.1 cent per share. One free option for every 2 new shares will be exercisable at 0.1 cent by 31 March 2015. The Entitlement Issue is conditionally underwritten by Patersons Securities, who will also act as lead manager. (ASX: HTI)

Mission NewEnergy
Shares in Mission NewEnergy reached a new all time low of 22 cents on 9 May. (ASX: MBT)

Nanosonics' share purchase plan will be at 53 cents per share and will raise $5 million if fully subscribed. The closing date is 25 June.

The share purchase plan follows a $15.5 million placement to institutional and sophisticated investors in early May. (ASX: NAN)

Pacific Environment
Pacific Environment has appointed Murray d'Almeida as chairman to succeed Dr Merv Jones.

Mr d'Almeida is a former accountant. He founded Retail Food Group Australia and was instrumental in the growth of its brands, Donut King and BB's Coffee, to over 300 stores in Australia and seven other countries. He has also been involved in the restaurant, wholesaling, farming and liquor industries.

Mr d'Almeida is a non-executive director of ASX-listed Hyperion Asset Management and of ASX and AIM-listed Beacon Hill Resources Plc. He has previously been chairman of a number of companies. (ASX: PEH)

Po Valley Energy
Shares in Po Valley Energy hit a new all time low of 12.5 censt on 7 May. (ASX: PVE)

The Sydney Morning Herald has reported that Style's voluntary administration was due to an alleged fraud over a $1.3 million loan facility.

The company owes over $2 million to unsecured creditors and another $1 million to secured creditors. The latest half year report shows net assets of $1.6 million.

Advertisements have been placed to find buyers for the assets or investors for a recapitalization, and a number of expressions of interest have been received, says the SMH. (ASX: SYP)

____ Pre-Revenue Securities ____

ASX 200

Dart Energy
Shares in Dart Energy fell to a new all time low of 22 cents on 10 May.

Dart Energy has said that it will not drill in the Sydney suburb of St Peters, although it then ambiguously said that it "is committed to open and transparent engagement with the communities in which we coexist, and to deal with all our stakeholders in a cooperative manner."

The statement was in response to media coverage of a decision by Marrickville Council to prohibit coal seam gas drilling at St Peters.

Marrickville and Greens Councillor Max Phillips moved an additional condition of consent that prohibits coal seam gas exploration and extraction for the Dial-A-Dump site where Dart Energy has plans to drill for coal seam gas. The additional condition was supported unanimously by the council.

The condition reads: "That mining or gas exploration or extraction activities be prohibited on the site, due to the proximity to residences, the safety and health risks associated with gas extraction, and the uncertainty over the effect of coal seam gas extraction on the local environment and aquifers, and the potential to further contaminate the land."

Mr Phillips said "This sends a strong signal to both the land holder and Dart Energy that Marrickville Council is united in its opposition to coal seam gas in the Inner West."

"Dial-A-Dump should rip up its landholder agreement with Dart Energy. It's now crystal clear that the community and council do not want gas exploration or extraction at St Peters. The State Government should cancel the exploration licence that covers the Sydney Metropolitan Area. No part of Sydney should become a dangerous coal seam gas field."

He also said there is some doubt that Dart Energy and the gas exploration companies that held the licence for St Peters have ever negotiated a land access agreement with the Dial-A-Dump company that owns the affected land.

Elsewhere in the business, director Peter Clarke has resigned due to personal reasons.

Subsidiary Dart Energy International Pte Ltd has announced an initial independent assessment of the Original Gas-in-Place for its portfolio of shale gas assets of between 28.1 trillion cubic feet (TCF) at the low case to 143 TCF at the high case. The Best Estimate is 76 TCF net to Dart International. (ASX: DTE)

ASX 300

Galaxy Resources
Galaxy Resources director Charles Whitfield has indirectly sold 40,200 shares at 65 cents per share. (ASX: GXY)

Micro Cap Companies

Alge.Tec has issued La Jolla Cove Investors another $200,000 worth of shares at 32.84 cents each under their convertible note arrangement.

Operationally, Algae.Tec has commenced commissioning its showcase biofuels facility, Shoalhaven One, at Nowra in NSW. Executive chairman Roger Stroud said commissioning is on track for production of algae biomass in early June, ramping up to capacity by the end of June.

Algae.Tec's USA-based technical director Earl McConchie is in Australia overseeing the commissioning team. (ASX: AEB)

Carnegie Wave Energy
Shares in Carnegie Wave Energy fell to a five year low of 3.9 cents on 9 May.

In early May Carnegie announced a new $16.3 million equity facility, along with a government grant, and its share price initially rose before falling back.

One reason could be that Carnegie's new equity provider, the Australian Special Opportunity Fund, LLP, is managed by The Lind Partners, LLC, a New York-based alternative asset management firm that was founded by Jeff Easton.

Lind's website says that Mr Easton was also a co-founder of SpringTree Global Investors, LLC "where he was instrumental in developing and implementing an institutional investment platform that completed more than AU$285,000,000 of headline investments into ASX-listed companies". It also says that Lind's team of six investment professionals all of whom worked together at SpringTree.

However, SpringTree Global Investors is general partner to the Springtree Special Opportunities Fund which until recently was also a funder of solar company Dyesol. But its strategy was to provide capital for discounted shares and then sell the shares on market, which helped drive down Dyesol's share price.

It remains to be seen if this strategy is also employed by Lind.

Meanwhile, the web site says "Lind selectively invests across various geographic regions, industries and economic environments with a focus on event-driven investment opportunities. Lind seeks to make investments into small-cap and mid-cap publicly-traded companies around the world whose shares trade in non-US dollar denominated currencies."

Carnegie director Greg Bourne has resigned to take up the position of acting Chair of the Australian Renewable Energy Agency (ARENA). ARENA commences on 1 July as a key component of the Australian Government's Clean Energy Future package and consolidating $3.2 billion in funding for renewable energy innovation.

Mr Bourne said "I've greatly enjoyed my time as a director of Carnegie. Even during my relatively short tenure, significant progress has been made towards the delivery of the first grid-connected CETO demonstration Project."

Carnegie has also completed the first detailed study of Bermuda's wave regime, which demonstrates the viability of the island for a commercial CETO wave energy project. Carnegie and partner Triton propose to develop a 20 MW commercial scale wave farm that also provides desalinated water to Bermuda. In 2009, the project was selected as one of the Bermuda Electric Light Company Ltd's preferred renewable energy projects.

Marc AR Bean, JP, MP, minister of Environment, Planning and Infrastructure Strategy, said "The success of this technology will serve to move Bermuda ever closer to our Energy White Paper targets of reducing our reliance on fossil fuels and increasing our reliance on renewable sources of energy. I look forward to the deployment of this promising, clean and efficient energy technology."

The technology could significantly increase energy and freshwater security and reduce its dependence on imported oil. (ASX: CWE)

Cell Aquaculture
Cell Aquaculture, whose shares are suspended, had March quarter revenue of $112,000. Revenue for the past six months was $527,000. Net operating and investing cashflow was minus $271,000. (ASX: CAQ)

Dyesol's shares fell to an all time lowof 13 cents on 9 May, and on high volume, prompting a query from the ASX.

Dyesol said it knew of no reason, but said there is shareholder frustration over the slow commercialization progress of its two key projects, and that $296,420 remains unconverted on the recently canceled equity line of credit that was driving the share price down.

Dyesol has won a Highly Commended Award in the Most Innovative Manufacturing Company category of the 9th Annual Manufacturers' Monthly Endeavour Awards.

Dyesol was a finalist in four categories: the Global Integration Award, the Most Innovative Manufacturing Company, the Young Manufacturer of the Year Award, and the Lifetime Achievement Award for Dyesol founder and director Sylvia Tulloch.

"Innovation is at the heart our company," said Ms Tulloch. "Dyesol has a culture of creating solutions and our focus is on clean, renewable energy." (ASX: DYE)

EcoQuest director Sylvia Tulloch indirectly acquired 260,000 shares and 260,000 options under the company's recent entitlement offer. (ASX: ECQ)

Enerji has raised $532,000 in a placement of 53,200,000 shares at 1 cent each and with 1 attaching option for every 2 new shares. The funds are for the Carnarvon project and working capital. (ASX: ERJ)

Origin Energy is no longer a substantial shareholder in Geodynamics due to dilution by issue of 42,761,981 securities by Geodynamics. (ASX: GDY)

Island Sky
Island Sky applied for and has received an extension of time to hold its annual general meeting as it is negotiating "a disposal of a major asset that would require shareholder approval. It is anticipated that the disposal will not be finalized by 31 May 2012 and it was considered not in the best interests of shareholders to hold two separate general meetings in close proximity". The extension is to 31 July. (ASX: ISK)

Lithex Resources
Lithex Resources' shares fell to a new low of 7 cents on 9 May.

This was despite the company announcing positive results for its initial rock chip program at ist Pilgangoora Project 120 kilometers southeast of Port Hedland in WA. 21 samples returned significant results of up to 5.08 per cent lithium oxide (Li2O).

"This sampling program confirms that one of the largest outcropping pegmatite bodies on the Project is lithium bearing, providing an exciting target for further work in this emerging hard rock lithium province," it said.

Lithex will conduct further geological mapping and sampling in preparation for an initial reverse circulation drill program to test the depth and extent of the lithium bearing pegamatites. (ASX: LTX)

MediVac subsidiary SunnyWipes has signed a collaborative agreement with the World Health Organisation (WHO) to improve safety and reduce the incidence of health care-associated infections through the increased use of hand hygiene products such as SunnyWipes. Sunnywipes is one of only 15 companies worldwide chosen to work alongside WHO on this initiative.

The platform, WHO Private Organizations for Patient Safety (POPS) platform, is aimed at aligning the companies' promotional messages for hand hygiene products through WHO recommendations, enhancing the quality of hand hygiene products, and encouraging product availability and accessibility in all parts of the world.

MediVac executive chairman, Paul McPherson, said "Our products have been developed in line with the WHO guidelines and, being natural based, are aligned with the WHO's objectives to increase health care workers' acceptance and usage."

This is the first of a number of new developments with the SunnyWipes range, he said. The company is awaiting the NSW Government Health Contracts for Hand Hygiene and Consumables products, to be announced shortly. Supporting the increased growth in sales to NSW Ambulance and other Government departments, some of these ventures include pharmacy and other markets in the retail sector.

According to WHO, of every 100 hospitalized patients, at least seven in developed and 10 in developing countries will acquire health care-associated infections. In intensive care units, the figure rises to around 30 per cent.

A new WHO survey of over 2,000 healthcare facilities in 69 countries found that 65 per cent are at a good level of progress with regards to hand hygiene promotion, resources and activities, but 35 per cent are still at an inadequate or basic level.

Promoting hand hygiene through reminders and education of health-care workers has occurred in more than 90 per cenet of health-care facilities, but improvement is still needed in the monitoring of hand hygiene practices and establishing optimal hand hygiene behaviour within a strong patient safety culture, said Mr McPherson. (ASX: MDV)

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